Gold prices dipped in Asian trade on Monday as diminishing concerns about a larger battle in the Middle East eroded safe haven demand for the yellow metal, while predictions on higher-for-longer U.S. interest rates weighed on prices.

Spot gold declined 0.9% to $2,370.45 an ounce, while June gold futures fell 1.2% to $2,384.05 an ounce at 00:48 ET (04:48 GMT).

Gold demand eases as Iran-Israel worries fade.
The yellow metal had risen rapidly during the last two weeks, reaching record highs of more than $2,400 per ounce as Iran and Israel launched strikes on each other.

However, Iran was seen downplaying the consequences of an Israeli assault on Friday, while also indicating no imminent plans for reprisal. This raised some hopes that the confrontation between the two countries would not worsen, reducing safe-haven demand for gold.

However, reports on Monday indicated that Iraqi forces had launched some strikes against a US military base in Syria, while Israel was spotted continuing its offensive against Gaza.

This kept certain Middle East tensions alive, especially since Israel and Hamas were unable to strike a cease-fire agreement.

Fears about US interest rates remain in play.
The dollar held at five-month highs, but US Treasury yields rose as traders remained concerned about rising interest rates for an extended period of time.

Strong inflation readings in March, combined with hawkish signals from Federal Reserve policymakers, caused markets to virtually price out chances for a rate decrease in June.

The likelihood of higher-for-longer interest rates pushed up gold prices, as such a situation raises the opportunity cost of investing in bullion.

Gold had recently soared into overbought position, making it vulnerable to profit-taking in the face of sticky interest rates.

Other precious metals declined on Monday. Platinum futures declined marginally to $943.80 per ounce, while silver futures down 2.8% to $28.038 per ounce.

Copper and aluminum prices hit 2-year highs on tight supply bets.
Copper and aluminum prices increased marginally on Monday, reaching new highs for 2024, as the expectation of tighter supplies, after harsher restrictions on Russian metal exports, kept prices elevated.

Three-month copper futures on the London Metal Exchange increased 0.3% to $9,919.50 per ton, while one-month copper futures rose 0.4% to $4.5105 per pound. Both contracts were at about two-year highs.

Aluminum futures climbed 0.2% to $2,671.0 per ton, marking their highest level since June 2022.